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Item 1. Business

2026-03-05 compared with 2025-03-31 · 138 added, 449 removed, 29 unchanged (95% of the section changed)

Phio Pharmaceuticals Corp.

“ we ,” “ our ” or the “ Company ”) is a clinical stage biotechnology company whose

proprietary INTASYL® small interfering RNA gene silencing technology is designed to make immune cells more effective in killing tumor

We are developing therapeutics that are designed to leverage INTASYL to precisely target specific proteins that reduce the body’s

ability to fight cancer, without the need for specialized formulations or drug delivery systems.

We are committed to discovering and developing

innovative cancer treatments for patients by creating new pathways toward a cancer-free future.

The Company operates with a single operating

segment and a single reporting segment – the Clinical segment.

PH-762 is an INTASYL compound designed

to reduce the expression of cell death protein 1 (“PD-1”).

PH-762 is currently being evaluated in a U.S.

multi-center Phase

1b dose-escalating clinical trial through the intratumoral injection of PH-762 for the treatment of patients with cutaneous squamous cell

carcinoma, melanoma and Merkel cell carcinoma.

The trial (NCT 06014086) is designed to evaluate the safety and tolerability of neoadjuvant

use of intratumorally injected PH-762, assess the tumor response, and determine the dose or dose range for continued study of PH-762 and

is expected to enroll up to 30 patients.

In May and December 2024, respectively, a Safety Monitoring Committee (SMC) reviewed data from

the first and second dose cohorts treated with PH-762, and in both instances recommended escalation to the next dose concentration.

total of 7 patients with cutaneous carcinomas have been enrolled in dose cohorts 1 and 2.

The second cohort enrolled a total of 4 patients

who were diagnosed with cutaneous squamous cell carcinoma.

At Day 36 (tumor excision), while patients in the first cohort had stable disease,

a complete response (100% tumor clearance) was reported for 2 patients with cutaneous squamous cell carcinoma.

Partial response (90% tumor

clearance) was reported for 1 patient with cutaneous squamous cell carcinoma and 1 patient had stable disease, having not progressed.

In this trial to date, intratumoral injection of PH-762 has been well tolerated in all enrolled patients and there were no dose-limiting

toxicities or clinically relevant treatment-emergent adverse effects in the patients receiving intratumoral PH-762.

The third dose cohort

is fully enrolled and patients in this cohort are currently in the treatment or follow-up phase of the study.

We expect to complete enrollment

of all patients in the study in the third quarter of 2025.

(“ Phio ,” “ we ,” “ our ” or the “ Company ”) is a clinical stage biopharmaceutical company whose proprietary INTASYL® small interfering RNA gene silencing technology is designed to make immune cells more effective in killing tumor cells.

We are developing therapeutics that are designed to leverage INTASYL to precisely target specific proteins that reduce the body’s ability to fight cancer, without the need for specialized formulations or drug delivery systems.

We are committed to discovering and developing innovative cancer treatments for patients by creating new pathways toward a cancer-free future.

The Company operates with a single operating segment and a single reportable segment.

INTASYL Technology

Overall, RNA is involved in the synthesis, regulation

and expression of proteins.

Overall, RNA is involved in the synthesis, regulation and expression of proteins.

RNA takes the instructions from DNA and turns those instructions into proteins within the body’s cells.

RNA interference, or RNAi, is a biological process that inhibits the expression of genes or the production of proteins.

Diseases are often

related to the incorrect protein being made, excessive amounts of a specific protein being made, or the correct protein being made, but

at the wrong location or time.

RNAi offers a novel approach to drug development because RNAi compounds can be designed to silence any

one of the thousands of human genes, many of which are considered “undruggable” by traditional therapeutics.

Our development efforts are based on our proprietary

INTASYL small interfering RNA technology.

Diseases are often related to the incorrect protein being made, excessive amounts of a specific protein being made, or the correct protein being made, but at the wrong location or time.

RNAi offers a novel approach to drug development because RNAi compounds can be designed to silence any one of the thousands of human genes, many of which are considered “undruggable” by traditional therapeutics.

Our development efforts are based on our proprietary INTASYL small interfering RNA technology.

It is a patented technology from which specific patented compounds are developed.

INTASYL compounds

are comprised of a unique sequence of chemically modified nucleotides (modified small interfering RNA, or siRNAs) that target a broad

range of cell types and tissues.

INTASYL compounds are comprised of a unique sequence of chemically modified nucleotides (modified small interfering RNA, or siRNAs) that target a broad range of cell types and tissues.

The compounds are designed to effectively silence genes that tumors use to evade the immune system.

Since the initial discovery of RNAi, drug delivery

has been the primary challenge in developing RNAi-based therapeutics.

Other siRNA technologies require cell targeting chemical conjugates

which limit delivery to specific cell types.

INTASYL is based on proprietary chemistry that is designed to maximize the activity and adaptability

of the compound and is unique in that it can be delivered to any cell type or tissue without the need to modify the chemistry.

designed to eliminate the need for formulations or delivery systems (for example, nanoparticles or electroporation).

This provides efficient,

spontaneous, cellular uptake with potent, long-lasting intracellular activity.

that our INTASYL technology provides the following benefits including, but not limited to:

Since the initial discovery of RNAi, drug delivery has been the primary challenge in developing RNAi-based therapeutics.

Other siRNA technologies require cell targeting chemical conjugates which limit delivery to specific cell types.

INTASYL is based on proprietary chemistry that is designed to maximize the activity and adaptability of the compound and is unique in that it can be delivered to any cell type or tissue without the need to modify the chemistry.

This is designed to eliminate the need for formulations or delivery systems (for example, nanoparticles or electroporation).

This provides efficient, spontaneous, cellular uptake with potent, intracellular activity.

We believe that our INTASYL technology provides the following benefits including, but not limited to:

Ability to target a broad range of cell types and tissues;

1 unchanged sentence

Efficient uptake by target cells, avoiding the need for assisted delivery;

Sustained, or long-term, effect in vivo ;

Ability to target multiple genes in one drug product;

Favorable clinical safety profile with local administration;

Promising clinical efficacy and pathology results in cutaneous squamous cell carcinoma (cSCC) with local administration;

Favorable clinical safety profile;

Readily manufactured under current good manufacturing practices.

INTASYL compounds are designed

to precisely target specific proteins that reduce the body’s ability to fight cancer, without the need for specialized formulations

or drug delivery systems, and are designed to make immune cells more effective in killing tumor cells.

Our efforts are focused on developing

immuno-oncology therapeutics using our INTASYL technology.

We have demonstrated preclinical activity against multiple gene targets including

PD-1, BRD4, CTLA-4, TIGIT and CTGF and have demonstrated preclinical efficacy in both direct-to-tumor injection and adoptive cell therapy

(“ ACT ”) applications with our INTASYL compounds.

The following table

summarizes our product pipeline.

INTASYL compounds are designed to precisely target specific proteins that reduce the body’s ability to fight cancer, without the need for specialized formulations or drug delivery systems, and are designed to make immune cells more effective in killing tumor cells.

Our efforts are focused on developing immuno-oncology therapeutics using our INTASYL technology.

We have demonstrated preclinical activity against multiple gene targets including PD-1, BRD4, CTLA-4, TIGIT and CTGF and have demonstrated preclinical efficacy in both direct-to-tumor injection and adoptive cell therapy (“ ACT ”) applications with our INTASYL compounds.

The following table summarizes our product pipeline.

Below we provide important information and context regarding each compound.

PH-762 is an INTASYL compound designed to reduce the

expression of PD-1.

PD-1 is a protein that inhibits T cells’ ability to kill cancer cells and is a clinically validated target in

immunotherapy.

Decreasing the expression of PD-1 can thereby increase the capacity of T cells, which protect the body from cancer cells

and infections, to kill cancer cells.

Our preclinical studies have demonstrated

that direct-to-tumor application of PH-762 resulted in potent anti-tumoral effects and have shown that direct-to-tumor treatment with

PH-762 inhibits tumor growth in a dose dependent fashion in PD-1 responsive and refractory models.

Importantly, direct-to-tumor administration

of PH-762 resulted in activity against distant untreated tumors, indicative of a systemic anti-tumor response.

We believe these data further

support the potential for PH-762 to provide a strong local immune response without the dose immune-related adverse effects seen with systemic

antibody therapy.PH-762 is currently being evaluated in a U.S.

multi-center Phase 1b dose-escalating clinical trial through the intratumoral

injection of PH-762 for the treatment of patients with cutaneous squamous cell carcinoma, melanoma and Merkel cell carcinoma.

(NCT 06014086) is designed to evaluate the safety and tolerability of neoadjuvant use of intratumorally injected PH-762, assess the tumor

response, and determine the dose or dose range for continued study of PH-762 and is expected to enroll up to 30 patients.

2023, we announced the dosing of the first patient under a previously cleared Investigational New Drug (“ IND ”) application

Food and Drug Administration, and the trial is currently open for the continued enrollment of patients.

In May and December

2024, respectively, a Safety Monitoring Committee (SMC) reviewed data from the first and second dose cohorts treated with PH-762, and

in both instances recommended escalation to the next dose concentration.

A total of 7 patients with cutaneous carcinomas have been enrolled

in dose cohorts 1 and 2.

The second cohort enrolled a total of 4 patients who were diagnosed with cutaneous squamous cell carcinoma.

Day 36 (tumor excision), while patients in the first cohort had stable disease, a complete response (100% tumor clearance) was reported

for 2 patients with cutaneous squamous cell carcinoma.

Partial response (90% tumor clearance) was reported for 1 patient with cutaneous

squamous cell carcinoma and 1 patient had stable disease, having not progressed.

Intratumoral injection of PH-762 has

been well tolerated in all patients enrolled in the trial to date.

There were no dose-limiting toxicities or clinically relevant treatment-emergent

adverse effects in the patients receiving intratumoral PH-762.

The third dose cohort is fully enrolled and patients in this cohort are

currently in the treatment or follow-up phase of the study.

We expect to complete enrollment of all patients in the study in the third

quarter of 2025.

Due to INTASYL’s ease of administration, we have shown that our compounds can easily be incorporated into current

ACT manufacturing processes.

In ACT, immune cells such as T cells, natural killer cells or dendritic cells are taken from a patient’s

or donor’s blood or tumor tissue, grown in large numbers in a laboratory, and then given back to the patient to help the immune

system fight cancer.

By treating a patient’s T cells with our INTASYL compounds while they are being grown outside the body, we

believe our INTASYL compounds can improve these immune cells to make them more effective in killing cancer.

Preclinical data generated

in collaboration with AgonOx, Inc.

(“ AgonOx ”), a private company developing a pipeline of novel immunotherapy drugs

targeting key regulators of the immune response to cancer, demonstrated that treating AgonOx’s “double positive” tumor

infiltrating lymphocytes (“ DP TIL ”) with PH-762 increased their tumor killing activity by two-fold.

In February 2021, we entered into a

clinical co-development collaboration agreement (the “ Clinical Co-Development Agreement ”) with AgonOx to develop a

T cell-based therapy using PH-762 and AgonOx’s DP TIL.

Under the Clinical Co- Development Agreement, we had agreed to reimburse

AgonOx up to $4 million in expenses incurred to conduct a Phase 1 clinical trial of PH-762 treated DP TIL in patients with advanced melanoma

and other advanced solid tumors.

In May 2024, we terminated the Clinical

Co-Development Agreement with AgonOx, which such termination was effective immediately.

Effective as of the date of termination, the Clinical

Co-Development Agreement and our continuing obligations and those of AgonOx thereunder were terminated in their entirety.

We are no longer

required to provide financial support for the development of costs incurred under the Clinical Co-Development Agreement and we are no

longer entitled to future development milestones or royalty payments from AgonOx’s licensing of its DP TIL technology.

to pay to AgonOx all monetary obligations that accrued prior to the termination of the Clinical Co-Development Agreement.

Remaining payments

to be made to AgonOx as of December 31, 2024 totaled $34,320, which primarily relate to accrued obligations for patient fees and other

miscellaneous costs as of the date of termination.

Pursuant to the terms of the Clinical Co-Development Agreement, each of the Company

and AgonOx shall be responsible for its own costs and expenses incurred in connection with the wind-down of the Phase 1 clinical trial.

Prior to the termination of the Clinical

Co-Development Agreement with AgonOx, PH-762 treated DP TIL were being evaluated in a Phase 1 clinical trial in the U.S.

with up to 18

patients with advanced melanoma and other advanced solid tumors by AgonOx.

The primary trial objectives were to evaluate the safety and

to study the potential for enhanced therapeutic benefit from the administration of PH-762 treated DP TIL.

AgonOx had enrolled three patients.

The first two patients were treated with DP TIL only and a third patient was treated with a combination of DP TIL and PH-762.

results for the single patient who received a combination of DP TIL and PH-762 showed tumor size reductions of 65%, 100% and 81%, respectively,

in three melanoma lesions.

PH-894 is an INTASYL compound that is designed to silence

BRD4, a protein that controls gene expression in both T cells and tumor cells, thereby affecting the immune system as well as the tumor.

Intracellular and/or commonly considered “undruggable” targets, such as BRD4, represent a challenge for small molecule and

antibody therapies.

Therefore, what sets this compound apart is its dual mechanism:

PH-894 suppression of BRD4 in T cells results in T

cell activation, and suppression of BRD4 in tumor cells results in tumors becoming more sensitive to being killed by T cells.

Preclinical studies conducted have demonstrated that

PH-894 resulted in a strong, concentration dependent and durable silencing of BRD4 in T cells and in various cancer cells.

PH-762, preclinical studies have also shown that direct-to-tumor application of PH-894 resulted in potent and statistically significant

anti-tumoral effects against distant untreated tumors, indicative of a systemic anti-tumor response.

These preclinical data indicate that

PH-894 can reprogram T cells and other cells in the tumor microenvironment to provide enhanced immunotherapeutic activity.

We have completed

the IND-enabling studies and are in the process of finalizing the study reports required for an IND submission with PH-894.

of the reprioritization to advance our clinical trial with PH-762 in the U.S., we have elected to defer the IND submission for PH-894.

PH-762 is an INTASYL compound designed to reduce the expression of PD-1.

PD-1 is a protein that inhibits T cells’ ability to kill cancer cells and is a clinically validated target in immunotherapy.

Decreasing the expression of PD-1 can thereby increase the capacity of T cells, which protect the body from cancer cells and infections, to kill cancer cells.

Our preclinical studies have demonstrated that direct-to-tumor application of PH-762 resulted in potent anti-tumoral effects and showed that direct-to-tumor treatment with PH-762 inhibits tumor growth in a dose dependent fashion in PD-1 responsive and refractory models.

Importantly, direct-to-tumor administration of PH-762 resulted in activity against distant untreated tumors, indicative of a systemic anti-tumor response.

We believe these data further support the potential for PH-762 to provide a strong local immune response without the dose immune-related adverse effects seen with systemic antibody therapy.

PH-762 is currently being evaluated in a U.S.

multi-center Phase 1b dose-escalating clinical trial through the intratumoral injection of PH-762 for the treatment of patients with cutaneous squamous cell carcinoma, melanoma and Merkel cell carcinoma.

The trial (NCT 06014086) is designed to evaluate the safety and tolerability of neoadjuvant use of intratumorally injected PH-762, assess the tumor response, and determine the dose or dose range for continued study of PH-762.

The study was fully enrolled in November 2025 with a total of 22 patients, 20 with cutaneous squamous cell carcinoma, one with melanoma and one with Merkel cell carcinoma.

While final study data is pending formal analysis, an FDA submission intended to propose and seek guidance for next steps in clinical study design for PH-762 is targeted for the second quarter of 2026.

A total of 22 patients with cutaneous carcinomas completed treatment in the Phase 1b trial and underwent excision of the treated lesional site.

Revised reported data supports an overall response rate of 65% for squamous cell carcinomas (cSCC).

Among the 20 patients with cSCC, 13 patients were classified as pathologic responders, including 9 patients with complete response (100% clearance), 2 patients with major/near clear response (greater than 90% clearance), and 2 patients with partial response (greater than 50% clearance).

A single patient with metastatic Merkel cell carcinoma had a partial response.

Seven cSCC patients and one melanoma patient had responses of less than 50%, however, none of the patients experienced a progression of the disease.

In this trial to date, intratumoral injection of PH-762 has been well tolerated in all enrolled patients and there were no dose-limiting toxicities or clinically relevant treatment-emergent adverse effects in any patients who received intratumoral PH-762.

PH-762 has been evaluated in patients within five dose-escalating cohorts, increasing drug concentration 20-fold from the first to the final cohort.

Safety data through an extended follow-up period is expected to be reported in the second quarter of 2026.

PH-894 is an INTASYL compound that is designed to specifically silence BRD4, a protein that controls gene expression in both T cells and tumor cells, thereby affecting the immune system as well as the tumor.

Intracellular and/or commonly considered “undruggable” targets, such as BRD4, represent a challenge for small molecule and antibody therapies.

Therefore, what sets this compound apart is its dual mode of action:

PH-894 suppression of BRD4 in T cells results in T cell activation, and suppression of BRD4 in tumor cells results in tumors becoming more sensitive to being killed by T cells.

Preclinical studies conducted have demonstrated that PH-894 resulted in a strong, concentration dependent and durable silencing of BRD4 in T cells and in various cancer cells.

Similar to PH-762, preclinical studies have also shown that direct-to-tumor application of PH-894 resulted in potent and statistically significant anti-tumoral effects against distant untreated tumors, indicative of a systemic anti-tumor response.

These preclinical data indicate that PH-894 can reprogram T cells and other cells in the tumor microenvironment to provide enhanced immunotherapeutic activity.

We have completed the IND-enabling studies required for an IND submission with PH-894.

As a result of the reprioritization to advance our clinical trial with PH-762 in the U.S., we have elected to defer the IND submission for PH-894.

Synergies With Other Therapies

Preclinical studies with our INTASYL compounds in combination

with antibodies resulted in enhanced potency in vivo.

The combination of INTASYL with antibodies may also increase the number of addressable

drug targets.

Unlike other antibody combination approaches, INTASYL can target multiple protein drug targets in a specific therapeutic

dose, thereby enhancing potency while maintaining a favorable tolerability and safety profile.

We have demonstrated preclinical efficacy with INTASYL

in ACT applications.

In preclinical studies, INTASYL was shown to enhance the activity of ACT therapies, including with tumor infiltrating

lymphocytes and natural killer cells.

As demonstrated in these preclinical studies, INTASYL is easily incorporated into current ACT manufacturing

Preclinical studies with our INTASYL compounds in combination with antibodies resulted in enhanced potency in vivo.

The combination of INTASYL with antibodies may also increase the number of addressable drug targets.

Unlike other antibody combination approaches, INTASYL can target multiple protein drug targets in a specific therapeutic dose, thereby enhancing potency while maintaining a favorable tolerability and safety profile.

We have demonstrated preclinical activity with INTASYL in ACT applications.

In preclinical studies, INTASYL was shown to enhance the activity of ACT therapies, including with tumor infiltrating lymphocytes and natural killer cells.

As demonstrated in these preclinical studies, INTASYL can be efficiently incorporated into current ACT manufacturing processes.

Intellectual Property

INTASYL compounds have a single-stranded phosphorothioate

region, a short duplex region, and contain a variety of nuclease-stabilizing and lipophilic chemical modifications that we believe combine

the beneficial properties of both conventional RNAi and antisense technologies.

We protect our proprietary information by means of United

States and foreign patents, trademarks and copyrights.

In addition, we rely upon trade secret protection and contractual arrangements

to protect certain of our proprietary information and products.

We have pending patent applications that relate to potential drug targets,

compounds we are developing to modulate those targets, methods of making or using those compounds, and proprietary elements of our drug

discovery platform.

We have also obtained rights to various patents and

patent applications under licenses with third parties, which require us to pay royalties, milestone payments, or both.

The degree of patent protection for biotechnology products

and processes, including ours, remains uncertain, both in the U.S.

and in other important markets, because the scope of protection depends

on decisions of patent offices, courts and lawmakers in these countries.

There is no certainty that our existing patents or others, if

obtained, will afford us substantial protection or commercial benefit.

Similarly, there is no assurance that our pending patent applications

or patent applications licensed from third parties will ultimately be granted as patents or that those patents that have been issued or

are issued in the future will stand if they are challenged in court.

We assess our license agreements on an ongoing basis and may from

time to time terminate licenses to technology that we do not intend to employ in our technology platforms, or in our product discovery

or development activities.

INTASYL compounds have a single-stranded phosphorothioate region, a short duplex region, and contain a variety of nuclease-stabilizing and lipophilic chemical modifications that we believe combine the beneficial properties of both conventional RNAi and antisense technologies.

We protect our proprietary information by means of United States and foreign patents, trademarks and copyrights.

In addition, we rely upon trade secret protection and contractual arrangements to protect certain of our proprietary information and products.

We have pending patent applications that relate to potential drug targets, compounds we are developing to modulate those targets, methods of making or using those compounds, and proprietary elements of our drug discovery platform.

We have also obtained rights to various patents and patent applications under licenses with third parties, which require us to pay royalties, milestone payments, or both.

We assess our license agreements on an ongoing basis and may from time to time terminate licenses to technology that we do not intend to employ in our technology platforms, or in our product discovery or development activities.

Patents and Patent Applications

We are actively seeking protection for our intellectual

property and are prosecuting a number of patents and pending patent applications covering our compounds and technologies.

A combined summary

of these patents and patent applications is set forth below in the following table:

We actively protect our intellectual property and are prosecuting a number of patents and pending patent applications covering our compounds and technologies.

We continue to rationalize our intellectual property position to protect our lead clinical candidates in key geographic regions while abandoning patents or applications that do not pertain to INTASYL or are country-specific in regions that are not of strategic geographic focus.

A combined summary of these patents and patent applications is set forth below in the following table:

United States

Other Markets

Our portfolio includes 77 issued patents, 69 of which

cover our INTASYL technology.

There are 19 patent families broadly covering both the composition and methods of use of our self-delivering

INTASYL platform technology and uses of our INTASYL compounds targeting immune checkpoints for cancer therapy, as well as cellular differentiation

and metabolism targets for Adoptive Cell Therapy cancer immunotherapies.

The INTASYL technology patents are scheduled to expire between

2029 and 2038.

Furthermore, there are 26 patent applications, encompassing

what we believe to be important new RNAi compounds and their use as therapeutics, chemical modifications of RNAi compounds that improve

the compounds’ suitability for therapeutic uses (including delivery) and compounds directed to specific targets ( i.e.

address specific disease states).

The patents that may issue from these pending patent applications will, if issued, be set to expire

between 2029 and 2044, not including any patent term extensions that may be afforded under the Federal Food, Drug, and Cosmetic Act (“ FFDCA ”)

(and the equivalent provisions in foreign jurisdictions) for any delays incurred during the regulatory approval process relating to human

drug products (or processes for making or using human drug products).

International PCT

Our portfolio includes 54 issued patents, 49 of which cover our INTASYL platform, and of those 27 cover immuno-oncology compounds and therapeutic uses.

There are 15 patent families broadly covering both the composition and methods of use of our self-delivering INTASYL platform technology and uses of our INTASYL compounds targeting immune checkpoints, cellular differentiation and metabolism targets for ex vivo cell-based cancer immunotherapies.

The INTASYL technology patents are scheduled to expire between 2029 and 2038.

Furthermore, there are 20 pending patent applications, encompassing what we believe to be important new RNAi compounds and their use as therapeutics, chemical modifications of RNAi compounds that improve the compounds’ suitability for therapeutic uses (including delivery) and compounds directed to specific targets ( i.e.

, that address specific disease states).

The patents that may issue from these pending patent applications will, if issued, be set to expire between 2029 and 2044, not including any patent term extensions that may be afforded under the Federal Food, Drug, and Cosmetic Act (“ FFDCA ”) (and the equivalent provisions in foreign jurisdictions) for any delays incurred during the regulatory approval process relating to human drug products (or processes for making or using human drug products).

Key Intellectual Property License Agreements

As we develop our own proprietary compounds, we continue

to evaluate our in-licensed portfolio as well as the field for new technologies that could be in-licensed to further enhance our intellectual

property portfolio and unique intellectual property position.

In September 2011, the Company entered into an agreement

with Advanced RNA Technologies, LLC (“ Advirna ”), pursuant to which Advirna assigned to us its existing patent and technology

rights related to the INTASYL technology in exchange for an annual maintenance fee, a one-time milestone payment upon the future issuance

of the first patent with valid claims covering the assigned patent and technology rights and the issuance of shares of Common Stock equal

to 5% of the Company’s fully-diluted shares outstanding at the time of issuance.

In 2012, we issued shares of Common Stock to Advirna

equal to 5% of our fully-diluted shares outstanding at the time of issuance and paid $350,000 to Advirna upon the issuance of the first

patent in 2014.

Additionally, we also pay to Advirna an annual maintenance fee of $100,000 and are required to pay low single-digit royalties

on any licensing revenue received by us with respect to future licensing of the assigned Advirna patent and technology rights.

any royalties owed to Advirna under the Advirna agreement have been minimal.

Our rights under the Advirna agreement will expire

upon the later of:

(i) the expiration of the last-to-expire of the “patent rights” (as defined therein) included in the

Advirna agreement and (ii) the abandonment of the last-to-be abandoned of such patents, unless earlier terminated in accordance with

the provisions of the Advirna agreement.

Further, the Company also granted back to Advirna a license under the assigned patent and technology

rights for fields of use outside human therapeutics.

As we develop our own proprietary compounds, we continue to evaluate our in-licensed portfolio as well as the field for new technologies that could be in-licensed to further enhance our intellectual property portfolio and unique intellectual property position.

In September 2011, we entered into an agreement with Advanced RNA Technologies, LLC (“ Advirna ”), pursuant to which Advirna assigned to us its existing patent and technology rights related to the INTASYL technology in exchange for an annual maintenance fee, a one-time milestone payment upon the future issuance of the first patent with valid claims covering the assigned patent and technology rights and the issuance of shares of Common Stock equal to 5% of our fully-diluted shares outstanding at the time of issuance.

In 2012, we issued shares of Common Stock to Advirna equal to 5% of our fully-diluted shares outstanding at the time of issuance and paid $350,000 to Advirna upon the issuance of the first patent in 2014.

Additionally, we also pay to Advirna an annual maintenance fee of $100,000 and are required to pay low single-digit royalties on any licensing revenue received by us with respect to future licensing of the assigned Advirna patent and technology rights.

To date, any royalties owed to Advirna under the Advirna agreement have been minimal.

Our rights under the Advirna agreement will expire upon the later of:

(i) the expiration of the last-to-expire of the “patent rights” (as defined therein) included in the Advirna agreement and (ii) the abandonment of the last-to-be abandoned of such patents, unless earlier terminated in accordance with the provisions of the Advirna agreement.

Further, we also granted back to Advirna a license under the assigned patent and technology rights for fields of use outside human therapeutics.

Manufacturing and Supply

not have any manufacturing capability and therefore we currently rely on and intend to continue to rely on contract manufacturing organizations

to produce our product candidates in accordance with regulatory requirements.

We currently rely on and contract with third parties

for the manufacture of drug substances and drug products for use in our preclinical studies and clinical trials in accordance with regulatory

requirements.

We expect that we will continue to rely on and contract with third parties to manufacture our product candidates in the

The biotechnology and pharmaceutical industries, including

the immuno-oncology field, are a constantly evolving landscape with rapidly advancing technologies and significant competition.

are a number of competitors in the immuno-oncology field including large and small pharmaceutical and biotechnology companies, academic

institutions, government agencies and other private and public research organizations.

Many of these companies are larger than us and

have greater financial resources and human capital to develop competing products.

We do not have any manufacturing capability and therefore we currently rely on and intend to continue to rely on contract manufacturing organizations to produce our product candidates in accordance with regulatory requirements.

We currently rely on and contract with third parties for the manufacture of drug substances and drug products for use in our non-clinical studies and clinical trials in accordance with regulatory requirements.

We expect that we will continue to rely on and contract with third parties to manufacture our product candidates in the future.

In July 2025, we announced that we had entered into a comprehensive drug substance development services agreement with a U.S.

manufacturer.

The manufacturing company will provide analytical and process development and Current Good Manufacturing Practice (“ cGMP ”) manufacture of our lead clinical development compound PH-762.

The biotechnology and pharmaceutical industries, including the immuno-oncology field, are a constantly evolving landscape with rapidly advancing technologies and significant competition.

There are a number of competitors in the immuno-oncology field including large and small pharmaceutical and biotechnology companies, academic institutions, government agencies and other private and public research organizations.

Many of these companies are larger than us and have greater financial resources and human capital to develop competing products.

Government Regulation

Review and Approval of Drugs in the United States

The United States and many other countries extensively

regulate the preclinical and clinical testing, manufacturing, labeling, storage, record-keeping, advertising, promotion, export, marketing

and distribution of drugs and biologic products.

Food and Drug Administration (“ FDA ”) regulates pharmaceutical

and biologic products under the FFDCA, the Public Health Service Act and other federal statutes and regulations.

To obtain approval of our future product candidates

from the FDA, we must, among other requirements, submit data supporting safety and efficacy for the intended indication as well as detailed

information on the manufacture and composition of the product candidate.

In most cases, this will require extensive laboratory tests,

preclinical studies and clinical trials.

The collection of these data, as well as the preparation of applications for review by the FDA

involve significant time and expense.

The FDA also may require post-marketing testing to monitor the safety and efficacy of approved products

or place conditions on any approvals that could restrict the therapeutic claims and commercial applications of these products.

authorities may withdraw product approvals if we fail to comply with regulatory standards or if we encounter problems at any time following

initial marketing of our products.

The first stage of the FDA approval process for a new

biologic or drug involves completion of preclinical studies and the submission of the results of these studies to the FDA.

together with proposed clinical protocols, manufacturing information, analytical data and other information submitted to the FDA through

an IND, must become effective before human clinical trials may commence.

Preclinical studies generally involve evaluation of product characteristics

and animal studies to assess the efficacy and safety of the product candidate.

Many of these studies must be conducted in accordance with

the FDA’s current Good Laboratory Practices, the Animal Welfare Act, and other applicable regulations.

After the IND becomes effective, a company may commence

human clinical trials.

The United States and many other countries extensively regulate the non-clinical and clinical testing, manufacturing, labeling, storage, record-keeping, advertising, promotion, export, marketing and distribution of drugs and biologic products.

Food and Drug Administration (“ FDA ”) regulates pharmaceutical and biologic products under the FFDCA, the Public Health Service Act and other federal statutes and regulations.

To obtain approval of our future product candidates from the FDA, we must, among other requirements, submit data supporting safety and efficacy for the intended indication as well as detailed information on the manufacture and composition of the product candidate.

In most cases, this will require extensive laboratory tests, non-clinical studies and clinical trials.

The collection of these data, as well as the preparation of applications for review by the FDA involve significant time and expense.

The FDA also may require post-marketing testing to monitor the safety and efficacy of approved products or place conditions on any approvals that could restrict the therapeutic claims and commercial applications of these products.

Regulatory authorities may withdraw product approvals if we fail to comply with regulatory standards or if we encounter problems at any time following initial marketing of our products.

The first stage of the FDA approval process for a new biologic or drug involves completion of preclinical studies and the submission of the results of these studies to the FDA.

These data, together with proposed clinical protocols, manufacturing information, analytical data and other information submitted to the FDA through an Investigational New Drug application (" IND "), must become effective before human clinical trials may commence.

Preclinical studies generally involve evaluation of product characteristics and animal studies to assess the efficacy and safety of the product candidate.

Many of these studies must be conducted in accordance with the FDA’s current Good Laboratory Practices, the Animal Welfare Act, and other applicable regulations.

After the IND becomes effective, a company may commence human clinical trials.

These are typically conducted in three sequential phases, but the phases may overlap.

Phase 1 trials consist of

testing the product candidate in a small number of patients or healthy volunteers, primarily for safety at one or more doses.

trials, in addition to safety, evaluate the efficacy of the product candidate in a patient population somewhat larger than Phase 1 trials.

Phase 1 trials consist of testing the product candidate in a small number of patients or healthy volunteers, primarily for safety at one or more doses.

Phase 2 trials, in addition to safety, evaluate the efficacy of the product candidate in a patient population somewhat larger than Phase 1 trials.

Phase 3 trials typically involve additional testing for safety and clinical efficacy in an expanded population at multiple test sites.

A company must submit to the FDA a clinical protocol, accompanied by the approval of the Institutional Review Board (“ IRB ”)

at the institutions participating in the trials, prior to commencement of each clinical trial.

To obtain FDA marketing authorization, a company must

submit to the FDA the results of the preclinical and clinical testing, together with, among other things, detailed information on the

manufacture and composition of the product candidate, in the form of a new drug application (“ NDA ”), or, in the case

of a biologic, a biologics license application (“ BLA ”).

The amount of time taken by the FDA to approve an NDA

or BLA will depend upon a number of factors, including whether the product candidate has received priority review, the quality of the

submission and studies presented, the potential contribution that the compound will make in improving the treatment of the disease in

question and agency resources.

The FDA maintains several programs to facilitate and

expedite the development and review of applications that are intended for the treatment of a serious or life-threatening disease or condition

that meet certain other criteria, including Fast Track Designation, Breakthrough Designation, Priority Review, and the Accelerated Approval

We anticipate that our products will be manufactured

by our strategic partners, licensees or other third parties.

Before approving an NDA or BLA, the FDA will inspect the facilities at which

the product is manufactured and will not approve the product unless the manufacturing facilities are in compliance with the FDA’s

current good manufacturing practice regulations (“ cGMP ”), which are regulations that govern the manufacture, holding

and distribution of a product.

A company must submit to the FDA a clinical protocol, accompanied by the approval of the Institutional Review Board (“ IRB ”) at the institutions participating in the trials, prior to commencement of each clinical trial.

To obtain FDA marketing authorization, a company must submit to the FDA the results of the preclinical and clinical testing, together with, among other things, detailed information on the manufacture and composition of the product candidate, in the form of a new drug application (“ NDA ”), or, in the case of a biologic, a biologics license application (“ BLA ”).

The amount of time taken by the FDA to approve an NDA or BLA will depend upon a number of factors, including whether the product candidate has received priority review, the quality of the submission and studies presented, the potential contribution that the compound will make in improving the treatment of the disease in question and agency resources.

The FDA maintains several programs to facilitate and expedite the development and review of applications that are intended for the treatment of a serious or life-threatening disease or condition that meet certain other criteria, including Fast Track Designation, Breakthrough Designation, Priority Review, and the Accelerated Approval pathway.

We anticipate that our products will be manufactured by our strategic partners, licensees or other third parties.

Before approving an NDA or BLA, the FDA will inspect the facilities at which the product is manufactured and will not approve the product unless the manufacturing facilities are in compliance with the FDA’s regulations, which are regulations that govern the manufacture, holding and distribution of a product.

Manufacturers of biologics also must comply with the FDA’s general biological product standards.

Our manufacturers also will be subject to regulation under the Occupational Safety and Health Act, the Nuclear Energy and Radiation Control

Act, the Toxic Substance Control Act and the Resource Conservation and Recovery Act and other applicable environmental statutes.

approval, the FDA and certain state agencies periodically inspect drug and biologic manufacturing facilities to ensure continued compliance

with the cGMP.

Our manufacturers also will be subject to regulation under the Occupational Safety and Health Act, the Nuclear Energy and Radiation Control Act, the Toxic Substance Control Act and the Resource Conservation and Recovery Act and other applicable environmental statutes.

Following approval, the FDA and certain state agencies periodically inspect drug and biologic manufacturing facilities to ensure continued compliance with the cGMP.

Our manufacturers will have to continue to comply with those requirements.

Failure to comply with these requirements subjects

the manufacturer to possible legal or regulatory action, such as suspension of manufacturing or recall or seizure of product.

patient experiences with the product must be reported to the FDA and could result in the imposition of marketing restrictions through

labeling changes or market removal.

Product approvals may be withdrawn if compliance with regulatory requirements is not maintained or

if problems concerning safety or efficacy of the product occur following approval.

The labeling, advertising, promotion, marketing and

distribution of a drug or biologic product also must be in compliance with FDA and Federal Trade Commission requirements which include,

among others, standards and regulations for off-label promotion, industry sponsored scientific and educational activities, promotional

activities involving the internet, and direct-to-consumer advertising.

We also will be subject to state and local requirements governing

the manufacturing and distribution of pharmaceutical products.

In addition, we will be subject to a variety of federal, state and local

regulations relating to the use, handling, storage and disposal of hazardous materials, including chemicals and radioactive and biological

In addition, we will be subject to various laws and regulations governing laboratory practices and the experimental use of

In each of these areas, failure to comply with the applicable requirements could result in administrative or judicial enforcement

action, which could include refusal to permit clinical trials, refusal to approve an application, withdrawal of an approval, issuance

of a warning letter, product recall, product seizure, suspension of production or distribution, fines, refusals of government contracts,

and restitution, disgorgement or civil or criminal penalties.

Any agency or judicial enforcement action could have a material adverse

effect on us.

In the future, we may also be subject to a variety

of regulations governing clinical trials and sales of our products outside the U.S.

Whether or not FDA approval has been obtained, approval

of a product candidate by the comparable regulatory authorities of foreign countries and regions must be obtained prior to the commencement

of marketing the product in those countries.

The approval process varies from one regulatory authority to another and the time may be

longer or shorter than that required for FDA approval.

In the European Union, the United Kingdom, Canada and Australia, regulatory requirements

and approval processes are similar, in principle, to those in the U.S.

European Union Data Laws for Review and Approval of Drugs in the European

Union Including France

The collection and use of personal health data and

other personal information in the European Union (“ EU ”) is governed by the provisions of the General Data Protection

Regulation (“ GDPR ”), which came into force in May 2018, and related implementing laws in individual EU Member States.

In addition, following the United Kingdom’s (“ UK ”) formal departure from the EU on January 31, 2020, and the

end of the transition period on December 31, 2020, the UK has become a “third country” for the purposes of EU data protection

A “third country” is a country other than the EU Member States and the three additional European Economic Area countries

(Norway, Iceland and Liechtenstein) that have adopted a national law implementing the GDPR.

However, the trade and cooperation agreement

(“ TCA ”) entered into between the EU and UK following the end of the transition period includes a provision, whereby

the transfer of personal data from the EU to the UK will not be considered as a transfer to a “third country” for a period

of four months starting from the entry into force of the TCA.

This period will be extended by two further months, unless the EU or the

Under the GDPR, personal data can only be transferred to third countries in compliance with specific conditions for cross-border

data transfers.

Appropriate safeguards are required to enable transfers of personal data from the EU Member States.

This status has a

number of significant practical consequences, in particular for international data transfers, competent supervisory authorities and enforcement

The GDPR increased responsibility and liability in relation to personal data that we process.

The GDPR imposes a number of strict obligations and

restrictions on the ability to process (processing includes collection, analysis and transfer of) personal data, including health data

from clinical trials and adverse event reporting.

The GDPR also includes requirements relating to the consent of the individuals to whom

the personal data relates, the information provided to the individuals prior to processing their personal data or personal health data,

notification of data processing obligations to the national data protection authorities and the security and confidentiality of the personal

The GDPR also prohibits the transfer of personal data to countries outside of the EU that are not considered by the EU to provide

an adequate level of data protection, except if the data controller meets very specific requirements.

These countries include the United

States, and following the end of the six month period as laid out in the TCA, it may include the UK if no adequacy decision is given prior

Following the Schrems II decision of the Court of Justice of the European Union on July 16, 2020, there is uncertainty as to

the general permissibility of international data transfers under the GDPR.

In light of the implications of this decision we may face difficulties

regarding the transfer of personal data from the EU to third countries.

The European Data Protection Board has adopted draft recommendations

for data controllers and processors who export personal data to third countries regarding supplementary measures to ensure compliance

with the GDPR when transferring personal data outside of the EU.

These recommendations were submitted to public consultation until December

21, 2020, however it is unclear when and in which form these recommendations will be published in final form.

Failure to comply with the requirements of the GDPR

and the related national data protection laws of the EU Member States may result in significant monetary fines, other administrative penalties

and a number of criminal offenses (punishable by uncapped fines) for organizations and in certain cases their directors and officers as

well as civil liability claims from individuals whose personal data was processed.

Data protection authorities from the different EU Member

States may still implement certain variations, enforce the GDPR and national data protection laws differently, and introduce additional

national regulations and guidelines, which adds to the complexity of processing personal data in the EU.

Guidance developed at both EU

level and at the national level in individual EU Member States concerning implementation and compliance practices are often updated or

otherwise revised.

There is, moreover, a growing trend towards required

public disclosure of clinical trial data in the EU which adds to the complexity of obligations relating to processing health data from

clinical trials.

Such public disclosure obligations are provided in the new EU Clinical Trials Regulation, EMA disclosure initiatives

and voluntary commitments by industry.

Failing to comply with these obligations could lead to government enforcement actions and significant

penalties against us, harm to our reputation, and adversely impact our business and operating results.

The uncertainty regarding the interplay

between different regulatory frameworks, such as the Clinical Trials Regulation and the General Data Protection Regulation, further adds

to the complexity that we face with regard to data protection regulation.

Environmental Compliance

Our research and development activities involve the

controlled use of potentially harmful biological materials as well as hazardous materials, chemicals and various radioactive compounds.

We are subject to federal, state and local laws and regulations governing the use, storage, handling and disposal of these materials and

specific waste products.

We are also subject to numerous environmental, health and workplace safety laws and regulations, including those

governing laboratory procedures, exposure to blood-borne pathogens and the handling of bio-hazardous materials.

The cost of compliance

with these laws and regulations could be significant and may adversely affect capital expenditures to the extent we are required to procure

expensive capital equipment to meet regulatory requirements.

However, to date, compliance with such environmental laws and regulations

has not had a material impact on our capital expenditures.

Failure to comply with these requirements subjects the manufacturer to possible legal or regulatory action, such as suspension of manufacturing or recall or seizure of product.

Adverse patient experiences with the product must be reported to the FDA and could result in the imposition of marketing restrictions through labeling changes or market removal.

Product approvals may be withdrawn if compliance with regulatory requirements is not maintained or if problems concerning safety or efficacy of the product occur following approval.

The labeling, advertising, promotion, marketing and distribution of a drug or biologic product also must be in compliance with FDA and Federal Trade Commission requirements which include, among others, standards and regulations for off-label promotion, industry sponsored scientific and educational activities, promotional activities involving the internet, and direct-to-consumer advertising.

We also will be subject to state and local requirements governing the manufacturing and distribution of pharmaceutical products.

In addition, we will be subject to a variety of federal, state and local regulations relating to the use, handling, storage and disposal of hazardous materials, including chemicals and radioactive and biological materials.

In addition, we will be subject to various laws and regulations governing laboratory practices and the experimental use of animals.

In each of these areas, failure to comply with the applicable requirements could result in administrative or judicial enforcement action, which could include refusal to permit clinical trials, refusal to approve an application, withdrawal of an approval, issuance of a warning letter, product recall, product seizure, suspension of production or distribution, fines, refusals of government contracts, and restitution, disgorgement or civil or criminal penalties.

Any agency or judicial enforcement action could have a material adverse effect on us.

In the future, we may also be subject to a variety of regulations governing clinical trials and sales of our products outside the U.S.

Whether or not FDA approval has been obtained, approval of a product candidate by the comparable regulatory authorities of foreign countries and regions must be obtained prior to the commencement of marketing the product in those countries.

The approval process varies from one regulatory authority to another and the time may be longer or shorter than that required for FDA approval.

In the European Union, the United Kingdom, Canada and Australia, regulatory requirements and approval processes are similar, in principle, to those in the U.S.

Human Capital Management

As of December 31, 2024, we had five full-time employees.

One employee utilizes a rented lab space, and the other four employees are primarily remote.

None of our employees are represented by

a labor union or covered by a collective bargaining agreement, nor have we experienced any work stoppages.

We continually evaluate our business needs and weigh

the use of in-house expertise and capacity with outsourced expertise and capacity.

We currently outsource the functions of our accounting

and finance department to a third-party consulting organization.

We currently outsource substantially all preclinical and clinical trial

work to third party contract research organizations and drug manufacturing contractors.

Our ability to identify, attract,

retain and integrate additional qualified key personnel is also critical to our success and the competition for skilled research, product

development, regulatory and technical personnel is intense.

To attract qualified applicants, we offer a total rewards package consisting

of base salary and cash target bonus, a comprehensive benefit package and equity compensation.

Bonus opportunity and equity compensation

increase as a percentage of total compensation based on level of responsibility.

Actual bonus payouts are based on performance.

A majority of Phio’s

employees have obtained advanced degrees in their professions and we support our employees’ further development with individualized

development plans, mentoring, coaching, group training, and conference attendance.

As of December 31, 2025, we had six full-time employees, all of whom work primarily on a remote basis.

None of our employees are represented by a labor union or covered by a collective bargaining agreement, nor have we experienced any work stoppages.

A majority of Phio’s employees have obtained advanced degrees in their professions and we support our employees’ further development with individualized development plans, mentoring, coaching, group training, and conference attendance.

Corporate Information

Effective July 5, 2024, the Company

completed a 1-for-9 reverse stock split of the Company’s outstanding Common Stock, including reclassifying an amount equal to the

reduction in par value to additional paid-in capital.

The reverse stock split did not reduce the number of authorized shares of the Company’s

common or preferred stock.

Effective July 5, 2024, we completed a 1-for-9 reverse stock split of our outstanding Common Stock, including reclassifying an amount equal to the reduction in par value to additional paid-in capital.

The reverse stock split did not reduce the number of authorized shares of our common or preferred stock.

All share and per share amounts have been adjusted to give effect to the reverse stock split.

We were incorporated in the state of Delaware in 2011 as RXi Pharmaceuticals Corporation.

November 19, 2018, we changed our name to Phio Pharmaceuticals Corp., to reflect our transition from a platform company to one that is

fully committed to developing groundbreaking immuno-oncology therapeutics.

In 2023, we implemented a cost rationalization program

driven by our transition from discovery research to product development.

This resulted in a decision not to renew the lease for office

and laboratory space in Marlborough, Massachusetts, which expired on March 31, 2024.

Beginning in April 2024, we have continued operations

as a remote business with a laboratory facility in Worcester, Massachusetts.

Our executive offices are located at 11 Apex Drive, Suite

300A PMB 2006, Marlborough, Massachusetts 01752 and our telephone number is (508) 767-3861.

The Company’s website address is http://www.phiopharma.com .

We make available on our website, free of charge, copies of our annual reports on Form 10-K, our quarterly reports on Form 10-Q and our

current reports on Form 8-K, and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Securities

Exchange Act of 1934, as amended, (the “ Exchange Act ”) as soon as reasonably practicable after these reports are filed

electronically with, or otherwise furnished to, the Securities and Exchange Commission (the “ SEC ”).

We also make available

on our website the charters of our audit, compensation, nominating and governance committees, as well as our corporate code of ethics

The SEC maintains an internet site that contains reports,

proxy and information statements, and other information regarding Phio and other issuers that file electronically with the SEC.

website address is http://www.sec.gov .

The contents of this website, and our website, are not incorporated by reference into this

report and should not be considered to be part of this report.

On November 19, 2018, we changed our name to Phio Pharmaceuticals Corp., to reflect our transition from a platform company to one that is fully committed to developing groundbreaking immuno-oncology therapeutics.

We operate as a remote business with a laboratory space in Worcester, Massachusetts, which expired on February 28, 2026.

We maintain shared office space at Life Sciences of Pennsylvania, 411 Swedeland Rd, Suite 23-1080, in King of Prussia, Pennsylvania.

Our website address is http://www.phiopharma.com .

We post on our website our press releases and filings we make with, the U.S.

Securities and Exchange Commission (the “ SEC ”).

We also make available on our website the charters of our audit, compensation, nominating and governance committees, as well as our corporate code of ethics and conduct.

The SEC maintains an internet site that contains reports, proxy and information statements, and other information regarding us and other issuers that file electronically with the SEC.

The SEC’s website address is http://www.sec.gov .

The contents of this website, and our website, are not incorporated by reference into this report and should not be considered to be part of this report.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1. Business